On the Frontier

Percy Bolton stands out in several ways. He’s a thoughtful financial planner and investment consultant to individuals and institutions who nevertheless loves his technological tools, though he’s also quick to point out that “We’re in the people business, not the computer business.” He started his professional life as a rep with an independent broker/dealer, though his interest in financial planning led him to become fee-only 20 years ago. He’s a solo practitioner with a relatively small staff of four, but he’s eager to point out that many people, “most of them legends” in the profession, gave him crucial help and direction in his early years. Finally, he’s built a successful practice–Percy E. Bolton Associates, with offices in Pasadena and Oakland, California–as an African American in a business environment that’s, frankly, quite pale. Put all those accomplishments together, along with a flair for pithy statements like “The retirement industry is abusive,” that reflect his client-centered principles, and you’ve got yourself an IA Leader. He spoke to Editor Jamie Green in mid-October.

What’s the current state of your practice, and is your motto “Designing Retirement Solutions for a Better Way to Live,” new?

It’s always been where we focused. We started out with “For a Better Way to Live,” but as the retirement issue is reaching a crescendo, it resonates as the major issue on everyone’s mind–whether an individual or an institution. It will be the same 30 years from now. Retirement is what all financial planners plan for–that’s why we came into existence to a large degree. Now we know whether the plan–for clients who have been with us for 15 to 20 years–[will allow them] to retire. If they can, we did our job. That’s the advantage of being around so long–you know if what you put in place, in partnership with your client, worked. It’s a great feeling if it did. It’s great to see, too, that all the things I’ve been taught actually work.

I have 75 clients and four staff members who all do something different from what I do. It’s a team approach.

How did you get started?

In my early years, I wanted to be an institutional consultant to pension plans. So I came in with a Ph.D. and started to work with an independent brokerage firm in Long Beach, California, called Universal Securities. Since I was new to the business, and came out of academia, I kept searching for a way to do a financial plan. I did my first plan on the computer, an XT with a 10-megabyte hard drive (see “Staying on the Leading Edge” on page 32). Universal was patient, and allowed me to produce plans at $250/plan, and they were all by hand. But that plan covered everything in the financial planning process, so I used the templates from my classes to create the balance sheets, the income statements, the tax analysis, cash flow sheets. I’ve seen some of those original [plans] from my existing clients; they’ve kept them on their shelves because they were like books. What was incredible is that they predicted the future, they were masterpieces–this was the mid-1980s.

When I first came to the B/D, they didn’t have anybody doing plans. They realized this was an important revenue source. I was doing about four a month, but every time I did a plan it had all the client’s assets. They saw that as a great marketing tool to get a sense of the value of a client. I had no idea that this was going to be used that way; I wanted to know everything I could about the client to give the best advice I could–I wanted to be very thorough, the cost of the plan didn’t matter to me, it was the excitement of it. The broker/dealer created a financial planning division, using my templates in that division.

How did you get more business in those early days?

It was word of mouth, but it was also the book. People would put that book on their shelves and show their friends, who’d say “I need that,” because it was so integrated and thorough. It looked nice, I had it bound.

That’s when I realized that I didn’t need to sell product anymore.

I left the broker/dealer in 1986. I was in a broker/dealer that was selling securities and insurance. I would go to a meeting and they would talk about products and I would talk about planning. I knew I was out of place and I made a decision to separate, gave up my licenses, so I went through an adjustment period of income.

In 1986 I became fee-only. I just sold my time. I realized that I could sell that talent to CPAs and lawyers, especially for their clients that they didn’t know much about in terms of finances and investing, and I started to specialize in the athletic and entertainment industry. They let me do the book on their clients.